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+--- Thread: Question about Partnership Salaries (/thread-question-about-partnership-salaries)
Question about Partnership Salaries - abbas_chinikham - 02-18-2009
There is a partnership firm of 3 employees. Out of those 2 are in Karachi and other is in USA. Now I want to ask whether the employees working in Khi office are eligible for any salary? Can they draw salary? or they are only entitled for profit at the end of year?
- tariqab - 02-18-2009
Abbas,
Check your partnership deed. (where partners are employees, as you mentioned)
Regards
Tariq
- abbas_chinikham - 02-18-2009
Nothing is mention in the agreement deed. It only shows Profit ratio.
- tariqab - 02-19-2009
Dear
Make a comprehensive resolution duly signed by the all partners, which will state the following things.
Who is/are entitled for salary from partnership business(name of partner/partners)
Amount of remuneration.
Frequency of payment (monthly/annually).
Note
The signed copy of resolution will become the addendum the âPartnership Deedâ
For further clarification you must study partnership Act of the country where are you existed.
Regards
Tariq
- awaisaftab - 02-19-2009
According to Partnership Act,1932 if no agreement about distribution of profit exists among partners then all the profits of a firm shall be distributed equally irrespective of capital and sevices contributed by them.
But salary can be given to a partner only if a contract exists among partners.
Awais Aftab
- abbas_chinikham - 02-23-2009
Thanks for ur reply.
But I am still confuse. My senario is Partnership deeeds doesnot say any thing abt contract. It only says profit percentage of 4 partners. It doesnot say anything about salary. We are paying only 2 partners who are actually working in the office. Other 2 doesnot have any say in operation as they are not present here. (They may be called as sleeping partner)
- Shahbaz - 02-23-2009
I'm not a big gun in the industry but can't you guys just make a new partnership deed with the consent of all partners on paying a certain sum of salary plus profit to active partners and paying only a share of profit to sleeping partners. It would solve the matter I guess. My post is just a simplified version of tariqab and awaisaftab.
- awaisaftab - 03-07-2009
Dear Abbas
Follow the advice of Shahbaz if Partnership deed is sielent about the Salaries of Patrners then a new Partnership deed must be prepared to avoid any misconception or future dispute. This is only way in which salaries can be paid to Partners. I suggest even if the sleeping partners are ready to pay salaries to active partners then also prepare new deed.
Regards,
Awais.